Market-Power Screen¶
Diagnostic screen — instantiates Bottleneck Power Governance
Tests whether an access point is genuinely a non-substitutable bottleneck — and pins down who controls exactly what — before any access duty is imposed.
A Market-Power Screen is the gating test that decides whether there is a bottleneck worth governing at all — and, if so, where. Its defining move is to separate a merely dominant or preferred provider from a genuinely non-substitutable chokepoint, and to refuse to trigger any access duty until that separation is made on evidence. It produces three findings and nothing else: whether the access point is truly hard to substitute, where control actually sits (which may not track formal ownership), and who depends on it and how captive they are. It is the front of the pipeline — a diagnostic, never a remedy.
Example¶
An internal-market team at a competition authority is asked whether a hyperscale cloud's proprietary managed-database service is a bottleneck that warrants access rules. The screen runs the substitutability question first: could customers realistically move to a rival within a reasonable time and cost? It tallies the frictions — proprietary APIs, data-egress fees, re-architecture effort — and applies a hypothetical-monopolist logic: if the provider quietly raised effective prices ≈10%, would enough customers leave to make it unprofitable? If not, the point is non-substitutable. Then it maps the control locus: the provider controls the API surface, egress pricing, and deprecation schedule, but not the underlying open query language — so the power boundary is the proprietary layer, not the standard beneath it. Finally it maps dependents: which downstream products would be stranded by a cutoff.
The output is a scoped finding: "non-substitutable across roughly a 2–3 year switching lead time; control sits at the proprietary API and egress layer; ≈40 downstream products dependent." That is what tells the governance regime whether to act and, crucially, on which layer. Had the screen instead found a close substitute a quarter away, its recommendation would be to impose nothing.
How it works¶
- Test substitutability, not popularity. Apply hypothetical-monopolist reasoning to switching cost and lead time — a large market share with an easy exit is not a bottleneck.
- Locate the control locus and its boundary. Identify what the controller can actually change — ranking, API, price, certification — separately from what it formally owns.
- Map dependents and their exit options. Enumerate who rides on the access point and how captive each is; captivity, not headcount, is the signal.
- Grade the finding. Attach an uncertainty band and a re-screen trigger, because substitutes and lock-in both move.
Tuning parameters¶
- Substitutability horizon — how long and costly a switch may take before a substitute "counts." A short horizon finds more bottlenecks; a long one excuses more.
- Power-boundary granularity — the whole firm versus the specific controllable layer; too coarse over-regulates, too fine misses bundled leverage.
- Dependence threshold — how much of an actor's operation must ride on the point to count as captive.
- Evidence bar — desk analysis versus switching surveys and market testing; a higher bar is slower but far harder to game.
- Re-screen cadence — one-shot versus periodic, since a substitute can appear or a lock-in deepen.
When it helps, and when it misleads¶
Its strength is that it stops the whole regime from firing on a merely popular provider, and it aims every later duty at the exact controllable layer rather than the whole firm. Its difficulty is that substitutability is genuinely hard to measure, and the screen is gamed from both sides: a controller points to a distant, theoretical substitute; a complainant insists switching is impossible. Its classic misuse is being run backwards — assembling the market definition to reach a verdict already chosen, "bottleneck" or "not," to license or block intervention. The discipline that guards against this is the hypothetical-monopolist test done honestly, with the uncertainty carried forward and the screen re-run as the market moves rather than frozen at the first finding.[n1]
How it implements the components¶
The Market-Power Screen fills only the diagnostic components — the ones a test can produce:
non_substitutable_access_point— its central output: the evidenced finding of genuine non-substitutability, distinguishing a bottleneck from a strong competitor.control_locus_and_power_boundary— it pins where control actually sits and what the controller can change, apart from formal ownership.dependency_and_affected_party_map— it enumerates who depends on the access point and how captive they are.
It scopes the problem but imposes no duty: the access conditions come from Essential Facility Access Rule, the price and non-discrimination duties from Common Carriage Obligation, and the live enforcement channel from Abuse Complaint and Appeals Process.
Related¶
- Instantiates: Bottleneck Power Governance — the entry diagnostic that scopes whether, and where, the rest of the regime applies.
- Sibling mechanisms: Essential Facility Access Rule · Common Carriage Obligation · Abuse Complaint and Appeals Process · Interoperability and Portability Mandate · Franchise or Concession Rebid · Mandatory Licensing or Access Pool · Price-Cap or Rate Review · Structural Separation or Unbundling
Editorial Notes¶
Form Classification¶
Form family: Assessment, Review & Assurance
Rationale: Market-Power Screen operates as a bounded evaluation of existing evidence or work that produces a finding or disposition because it tests whether an access point is genuinely a non-substitutable bottleneck — and pins down who controls exactly what — before any access duty is imposed.
Independent corroboration: The frozen evidence defines Market-Power Screen as 'Tests whether an access point is genuinely a non-substitutable bottleneck — and pins down who controls exactly what — before any access duty is imposed', so its operative form is Assessment, Review & Assurance.
Nearest alternative: Analysis, Modeling & Optimization — The screen uses market-power analysis, but it is classified as assurance because its bounded purpose is a graded bottleneck finding before imposing a duty.
Review outcome: Independent reviewer agreement; medium confidence.
Origin Attribution¶
Primary origin: Law & Governance
Origin pattern: Cross-disciplinary synthesis
Present-day reach: Specialized
Rationale: The entry's decisive act is an antitrust/access-governance screen: it determines whether control of a non-substitutable input warrants an access duty. Industrial-organization economics supplies the market-power test, but the screen's procedural form and consequence belong to competition law.
Related originating lineages:
- Economics & Finance — Retained as a formative lineage independently identified as primary: Market power and non-substitutable bottlenecks are core concepts of industrial organization economics.
Review resolution: The U.S. Department of Justice's Merger Guidelines place foreclosure analysis in a legal decision procedure that asks whether control of products or services can limit rivals' access. That supports law_governance as primary while retaining industrial-organization economics as formative, rather than treating every market application as origin. The alternates are retained only as formative or independently established origins, not because the mechanism can be applied there. origin_mode=cross_disciplinary_synthesis states the provenance relationship; domain_reach=specialized separately records breadth because established use remains concentrated in a bounded professional context. confidence=high reflects the strength and specificity of the evidence; encyclopedia_synthesis=false because the entry generalizes an established mechanism without inventing a new composite.
Review outcome: Researched adjudication after independent review; high confidence.
Sources consulted:
- https://www.justice.gov/atr/merger-guidelines/applying-merger-guidelines/guideline-5 — Primary U.S. antitrust guidance describes the access-limitation and foreclosure screen used to evaluate market power.
Notes¶
The screen deliberately sets a high bar: most preferred providers are not bottlenecks. Keeping that bar high is what keeps access duties rare and targeted — an over-broad screen turns every strong competitor into a regulated one, which is its own harm. Every downstream mechanism here should be able to point back to a screen finding that justifies it.
[n1] The SSNIP or "hypothetical monopolist" test asks whether a candidate would profitably sustain a small but significant, non-transitory increase in price without enough customers defecting — the standard antitrust method for market definition. It is referenced here to keep "bottleneck" a measured finding rather than a label, not as a claim about any specific market. ↩